LICENSES & PERMITS 14,233 734 3.4 13,321 1,149 9.3 12,372 (1,934) -13.6 SALES & CHARGES FOR SERVICES 31,364 (1,390) -4.2 32,934 (883) -2.6 33,837 2,233 7.1 FINES & FORFEITURES 18,780 (1,394) -6.9 20,174 (1,432) -6.7 21,626 (1,833) -7.8 MISCELLANEOUS 20,827 (7,291) -23.9 28,118 3,043 12.1 23,073 (690) -2.7 TRANSFERS IN 2,984 340 22.1 2,444 (14,337) -83.6 16,981 11,098 188.6 Grant Revenue, Investent Income and Expenditure Recoveries are included in Miscelaneous Revenue TOTAL INTERGOVERNMENTAL REVENUE 4.Income 1ax 1rend $240 $230 $260 $270 $280 $290 $300 $310 $320 M||||ons INCCML 1Ak kLVLNUL Mayor's Estimate
$296 Million -7.8 -1.8 average of +3.7 per year lncrease over 4 years +4.7 S.4 3.7 average of +4.3 per year lncrease over 3 years -1.S S.Income 1ax Month|y g 1 of 1
15 17 19 21 23 25 27 29 31 33 35 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec M i l l i o n s
MONTHLY INCOME TAX RECEIPTS 2,008 2,009 2,010 2,011 2,012 2,013 Annua| Income 1ax kece|pts
1he Loca| Government Iund ls SLaLe of Chlo revenue sharlng program ln whlch clLles share ln Lhe collecLlon of: A) Lhe SLaLe lncome Lax 8) Sales Laxes C) CorporaLe lranchlse u)and ubllc uLlllLles Lxclse 1axes. 1hese funds are d|str|buted ln Lwo ways: l. nlne-LenLhs (90) Lo counLles dlvlded among all Lowns, vlllages and munlclpallLles ll. and one-LenLh dlrecLly LoclLles whlch collecL an lncome Lax. S6.2 S3.2 47.3 S4.0 SS.S S6.3 SS.4 46.6 47.3 34.7 28.2 27.7 $23 $30 $33 $40 $43 $30 $33 $60 2007 2008 2009 2010 2011 2012 2013 2014 A n n u a |
k e v e n u e
M | | | | o n s
Loca| Government Iund kevenues 5 M||||ons CollecLlons ClLy Share of 8evenues lor 2013 and beyond 8evenue Sharlng [ 30 of CollecLlons 6. Loca| Goverment Iund
2 of 2 Loca| Government Iund - |mpacts of schedu|ed reduct|on |n the port|on of co||ect|ons go|ng to the c|ty - 5 m||||ons ! #$%&'( )& #*++(#,)*&- 1sL Palf CollecLlon raLe reducLlon AmounL ClLy 8ecelved 2nd Palf CollecLlon raLe reducLlon AmounL ClLy 8ecelved Local CovernmenL lund 8evenue year-Lo- year change AcLuals 33.9 0 28.0 33.9 0 28.0 33.9 2007 ./0! 36.2 0 28.1 36.2 0 28.1 36.2 0.3 -./0 2008 10/2! 33.3 0 26.7 33.3 0 26.7 33.3 (2.9) 1/.20 2009 132/4! 46.6 0 23.3 46.6 0 23.3 46.6 (6.7) 132.40 2010 3/0! 47.3 0 23.7 47.3 0 23.7 47.3 0.7 3./0 2011 35/2! 34.0 0 27.0 34.0 23 20.3 47.3 (0.0) 1-.30 2012 2/6! 33.3 23 20.8 33.3 30 13.9 34.7 (12.6) 124.40 2013 3/0! 36.3 30 14.1 36.3 30 14.1 28.2 (6.3) 135.50 luLure 2014 13/7! 33.4 30 13.9 33.4 30 13.9 27.7 (0.3) 13.60 * Cells hlghllghLed ln yellow are "LsLlmaLed." values shown are whaL annual collecLlon amounL ls requlred Lo generaLe Lhe amounL recelved by Lhe clLy. 7. roperty 1ax Graph - 8 yr 1 of 1
43.3 42.9 41.9 38.6 36.6 36.0 30 32 34 36 38 40 42 44 46 48 30 2007 2008 2009 2010 2011 2012 2013 2014 M | | | | o n s
IN1LkIUND SU8SIDILS 5M||||ons 1ransfer 1o 8alny uay 8es lund Subsldy 1o ubllc AudlLorlum / Conv. CenLer SLreeLs Schools CemeLery lund lx CenLer lund Colf SLadlum lund 1ransfer Lo CLher SubClasses Slnklng lund uebL Servlce 8a|ance |n ka|ny Day Iund at 1]1]2014 518.7 m||||on 2 of 2 2014 Mayors Estimate $ change % change 2013 Unaudited Actuals 1ota| Interfund Subs|d|es 32,923,220 3,240,940 10.9 29,682,280 1ransfer 1o 8alny uay 8eserve lund - (3,000,000) -100.0 3,000,000 uebL Servlce lunds 1ransfer 1o CLher Subfunds 2,000,000 2,000,000 >100 - SLadlum CaplLal 8epalr 1ransfer Lo uebL Servlce lund 8,703,807 399,343 4.8 8,304,464 Subsldy 1o Slnklng lund 828,132 403,411 93.9 422,721 1ransfer Lo SLadlum lund 10,113,123 2,863,123 39.3 7,230,000 CLher 1ransfers Subsldy 1o SLreeL ConsLrucLlon 7,974,936 2,110,064 36.0 3,864,872 1ransfer Lo School 8ecreaLlon lund 1,173,000 - 0.0 1,173,000 1ransfer Lo lx CenLer 200,000 61,770 44.7 138,230 Subsldy 1o CemeLery 30,134 30,134 >100 - Subsldy 1o Colf Course 189,893 189,893 >100 - Subsldy Lo ubllc AudlLorlum/ConvenLlon CenLer 1,688,193 161,200 10.6 1,326,993 1ransfer 1o 8alny uay 8es lund Subsldy 1o ubllc AudlLorlum / Conv. CenLer ka|ny Day Iund 16b. Interfund Subs|d|es 1 of 1 2014 Mayors Estimate $ change % change 2013 Unaudited Actuals 1ota| Interfund Subs|d|es 32,923,220 2S,396,1S3 8S.6 29,682,280 1ransfer 1o 8alny uay 8eserve lund - (224,000) -100.0 224,000 uebL Servlce lunds 1ransfer 1o CLher Subfunds 2,000,000 2,000,000 >100 - SLadlum CaplLal 8epalr lund 1ransfer Lo uebL Servlce lund 8,703,807 6,332,308 300.9 2,171,299 Subsldy 1o Slnklng lund 828,132 823,892 >100 2,240 1ransfer Lo SLadlum lund 10,113,123 10,113,123 #ulv/0! - CLher 1ransfers Subsldy 1o SLreeL ConsLrucLlon 7,974,936 4,793,921 130.7 3,181,013 1ransfer Lo School 8ecreaLlon lund 1,173,000 1,173,000 #ulv/0! - 1ransfer Lo lx CenLer 200,000 200,000 #ulv/0! - Subsldy 1o CemeLery 30,134 41,333 >100 8,799 Subsldy 1o Colf Course 189,893 (1,227,993) >100 1,417,886 Subsldy Lo ubllc AudlLorlum/ConvenLlon CenLer 1,688,193 1,166,363 223.3 321,828 17. 1ota| C|eve|and Long 1erm Cb||gat|ons 1 of 2 nC1L 3 - uL81 Anu C1PL8 LCnC-1L8M C8LlCA1lCnS A summary of Lhe changes ln long-Lerm debL and oLher long-Lerm obllgaLlons of Lhe ClLy durlng Lhe year ended uecember 31, 2012, are as follows: (AmounLs ln 000's) 8a|ance 1]1]2012 Add|t|ons keduct|ons 8a|ance 12]31]2012 Ceneral CbllgaLlon 8onds 298,660 38,338 (28,298) 308,700 CLher uebL and CaplLal Leases 361,399 361,399 CLher L1 CbllgaLlons 102,997 102,997 1C1AL Ceneral lund L1 CbllgaLlons 763,036 38,338 (28,298) 773,096 8uslness-1ype AcLlvlLles (LnLerprlse lunds) AlrporL SysLem 8evenue 8onds: 891,883 233,130 (263,103) 863,930 ubllc ower SysLem 8evenue 8onds: 261,766 17,143 (26,030) 232,881 WaLerworks lmprovemenL 8evenue 8onds: 698,413 121,120 (34,000) 783,333 113,323 963 (6,744) 109,742 arklng laclllLles 8efundlng 8evenue 8onds 34,043 (2,420) 31,623 CLher L1 CbllgaLlons (8,386) 34,333 (2,333) 23,814 1C1AL 8uslness-1ype L1 CbllgaLlons 1,993,248 408,933 (334,634) 2,067,327 1oLal uebL and CLher Long-1erm CbllgaLlons 2,736,304 447,271 (362,932) 2,840,623 $ - Chlo WaLer uevelopmenL AuLhorlLy and ubllc Works Commlsslon Loans 17. 1ota| C|eve|and Long 1erm Cb||gat|ons g 2of 2 17. 1ota| C|eve|and Long 1erm Cb||gat|ons 18. Governmenta| Cb||gat|ons g 1 of 2 C|ty of C|eve|and debt ob||gat|ons 56S7 M||||on as of 12]31]2013 * non-1ax 8evenue 8onds aL 1/1/2013 lncludes SLadlum 8onds ($10.373 mllllon), Lconomlc and CommunlLy uev. /Core ClLy 8onds ($38.933 mlllon) and Lower Luclld Ave. 1ll bonds ($6.363 mllllon). 5298.7 , 46 5S3.0 , 8 516.2 , 2 5S8.6 , 9 54.3 , 1 5129.S , 20 510.8 , 2 5117.7 , 18 50.8 , 0 Ceneral CbllgaLlon 8onds SubordlnaLed lncome 1ax 8onds SubordlnaLe Llen lncome 1ax 8onds CaplLal Lease CbllgaLlons urban 8enewal 8onds non-1ax 8evenue 8onds* Annual ApproprlaLlon 8onds CerLlflcaLes of arLlclpaLlon (SLadlum) CaLeway noLe ayable CCvL8nMLn1 AC1lvl1lLS C1nLk GCVLkNMLN1AL DL81 18. Governmenta| Cb||gat|ons g 2 of 2 8a|ance 1]1]2013 2013 Debt Issued Debt kefunded or Defeased Debt ket|red 8a|ance 12]31]2013 Governmenta| Act|v|t|es: Ceneral CbllgaLlon 8onds x 308,700 - - -26,130 282,330 SubordlnaLed lncome 1ax 8onds x 30,020 -3,103 46,913 SubordlnaLe Llen lncome 1ax 8onds x 92,380 33,840 -3,730 124,490 CaplLal Lease CbllgaLlons x 16,236 6,333 -3,373 16,236 470,191 5 23,143 $ urban 8enewal 8onds x 4,270 -380 4,270 non-1ax 8evenue 8onds* x 33,894 -2,786 33,108 Annual ApproprlaLlon 8onds x 10,763 -333 10,763 ;*,%+ <)=(#, <(>, 338,263 42,373 0 -40,261 S38,334 5 22,337 $ CerLlflcaLes of arLlclpaLlon (SLadlum) x 123,603 -3,936 117,669 CaLeway noLe ayable x 1,000 -230 730 1oLal CovernmenLal AcLlvlLles 662,870 42,373 -46,447 6S6,7S3 5 6,482 $ 2,043.38 9483 1he Chlo 8evlsed Code provldes LhaL Lhe neL debL of Lhe munlclpal corporaLlon, wheLher or noL approved by Lhe elecLors, sha|| not exceed 10.S of the assessed va|ue of a|| property ln Lhe munlclpal corporaLlon as llsLed and assessed for LaxaLlon. ln addlLlon, Lhe unvoted net debt of mun|c|pa| corporat|ons cannot exceed S.S of tota| assessed va|ue of property. 1he ClLy's tota| debt ||m|t (10.S) |s 5S14,494,983 and unvoted debt ||m|t (S.S) |s 5269,497,372. AL !anuary 1, 2014, Lhe ClLy had vlrLually no capaclLy under Lhe lndlrecL debL llmlLaLlon calculaLlon per Lhe Chlo 8evlsed Code Lo lssue any addlLlonal unvoLed debL. Powever, Lhe debL llmlLaLlons are noL expecLed Lo affecL Lhe flnanclng of any currenLly planned faclllLles or servlces. * non-1ax 8evenue 8onds aL 1/1/2013 lncludes SLadlum 8onds ($10.373 mllllon), Lconomlc and CommunlLy uev. /Core ClLy 8onds ($38.933 mlllon) and Lower Luclld Ave. 1ll bonds ($6.363 mllllon). C|ty of C|eve|and Debt 5000s lncrease / (decrease) slnce !anuary 2012 19. Goverment Cperat|ons Debt Chart 1oLal ?8 Lnd rlnclpal 8alances CovernmenL CperaLlons uebL CC 8ond rlnclpal 8alance SubordlnaLed lncome 1ax CaplLal Lease CbllgaLlons Caslno 8evenue 8ond CLher AddlLlons 293,380,000 68,200,000 812,000 362,392,000 319,083,000 66,900,000 238,000 386,223,000 6234 Cap Lease 150 200 250 300 350 400 450 500 550 T O T A L G E N E R A L O B L IG A T IO N D E B T
- M illio n s $ s
Goverment Operations Principal year-end balances $ millions Casino Revenue Bond Capital Lease Obligations Subordinated Income Tax GO Bond Principal Balance
531.3
YEARLY GO BOND ISSUANCE $ millions 544.9 50 534.8 516.8 564.1 576.7 50 510.0 50 544.8 GC Debt Capac|ty was $269.3 mllllon aL 3.3 of Lhe assessed valuaLlon of real properLy aL 12/31/2013 538.3
2014 SubordlnaLed lncome 1ax +541.0 20. 2014 8ond Debt Load Descr|pt|ons of the Governmenta| Debt Cb||gat|ons g 1 of 7 CLnL8AL lunu uL81 LCAu Government (r|nc|pa| & Interest ayments) 2014 Debt ket|rement 2014 Interest Cther Costs 1ota| Debt Load Genera| Cb||gat|on 8onds 24,983,000 $ 13,378,213 $ - $ 38,363,213 $ Urban kenewa| 8onds due through 2018, 6.63 to 6.7S 379,773 288,200 $ 0 867,973 $ Subord|nated Income 1ax kefund|ng 8onds due through 2024, S.00 to S.2S 8onds 3,263,000 2,336,200 0 3,601,200 $ Subord|nate L|en Income 1ax 8onds due through 2031, 2.00 to 6.34 3,333,000 7,617,270 0 12,972,270 $ Stad|um due through 2020, 3.S0 to S.13 1,170,000 $ 460,044 $ 9,200,000 $ 10,830,044 $ Cert|f|cates of art|c|pat|on-Stad|um due through 2028,1.42 to S.70 3,890,000 $ 2,300,123 $ - $ 8,190,123 $ 1axab|e Lcon and Com Dev. (Core C|ty 8onds) Ser|es 2004 & 2008 due through 2033 1,370,000 $ 1,033,200 $ 13,170 $ 2,620,370 $ Lower Luc||d Ave. 1II 2003A&8 due through 2032, 1.00 to S.00 133,000 $ 148,363 $ - $ 303,363 $ Annua| Appropr|at|on 8onds - I|ats Last 8ank due through 203S, 2.60 to 6.00 334,730 $ 338,463 $ - $ 873,213 $ Cap|ta| Lease Cb||gat|ons, due through 2018, 2.26 to 3.22 3,373,100 $ 406,434 $ - $ 3,981,334 $ Gateway Note ayab|e, due through 2016 230,000 $ - $ - $ 230,000 $ S|nk|ng Iund Cperat|ons - - $ 939,640 $ 939,640 $ 47,129,623 $ 28,308,334 $ 10,174,810 $ 83,812,969 $ 20. 2014 8ond Debt Load Descr|pt|ons of the Governmenta| Debt Cb||gat|ons g 2 of 7 1Ak kLVLNUL 8CNDS Genera| Cb||gat|on 8onds: 12]31]2013 r|nc|pa| 8a|ance 5000s 12]31]2012 r|nc|pa| 8a|ance 5000s 2014 Debt ket|rement 2014 Interest 1ota| Debt Load 2S7,S6S 5 282,SS0 5 24,983,000 $ 13,378,213 $ 38,363,213 $ 1ax kevenue 8onds 12]31]2013 r|nc|pa| 8a|ance 2014 Debt ket|rement 2014 Interest Cther Costs 1ota| Debt Load Urban kenewa| 8onds due through 2018, 6.63 to 6.7S 4,270,000 5 379,773 288,200 $ 867,973 $ Subord|nated Income 1ax kefund|ng 8onds due through 2024, S.00 to S.2S 8onds 46,91S,000 5 3,263,000 2,336,200 3,601,200 $ Subord|nate L|en Income 1ax 8onds due through 2031, 2.00 to 6.34 * 124,490,000 5 3,333,000 7,617,270 12,972,270 $ 17S,67S,000 5 9,199,773 10,241,670 0 19,441,443 $ GC 8onds 282,SS0,000 5 24,983,000 $ 13,378,213 $ - $ 38,363,213 $ 1ota| 1ax kevenue 8onds 4S8,22S,000 5 34,184,77S 5 23,619,883 5 - 5 S7,804,6S8 5 * ln 2014 Lhe plan ls Lo lssue an addlLlonal $41 mllllon ln SubordlnaLed Llen lncome 1ax 8onds Lo flnance Lhe Cl CaplLal rogram ClLy 8onds or oLher debL LhaL llke Ceneral CbllgaLlon 8onds LhaL rely on ClLy of Cleveland Lax revenues for servlce of Lhe rlnclpal and lnLeresL annual uebL Load Cther Governmenta| Cb||gat|ons - supported by C|ty tax kevenues 20. 2014 8ond Debt Load Descr|pt|ons of the Governmenta| Debt Cb||gat|ons g 3 of 7 Cther Governmenta| Cb||gat|ons Non-1ax kevenue 8onds: 12]31]2013 r|nc|pa| 8a|ance 2014 Debt ket|rement 2014 Interest Cther Costs 1ota| Debt Load Stad|um due through 2020, 3.S0 to S.13 9,48S,000 5 1,170,000 $ 460,044 $ 9,200,000 $ 10,830,044 $ 117,670,000 3,890,000 $ 2,300,123 $ 8,190,123 $
38,9SS,000 1,370,000 $ 1,033,200 $ 13,170 $ 2,620,370 $ 6,364,000 133,000 $ 148,363 $ 303,363 $ 10,76S,000 334,730 $ 338,463 $ 873,213 $ - $ Cap|ta| Lease Cb||gat|ons, due through 2018, 2.26 to 3.22 19,471,000 3,373,100 $ 406,434 $ 3,981,334 $ Gateway Note ayab|e, due through 2016 7S0,000 230,000 $ 230,000 $ 200,22S,000 5 12,944,830 $ 4,888,631 $ 9,213,170 $ 27,048,671 $ 1ota| 1ax kevenue 8onds 4S8,22S,000 5 34,184,773 $ 23,619,883 $ - $ 37,804,638 $ 1C1AL GCVLkNMLN1AL DL81 LCAD 6S8,4S0,000 5 47,129,62S 5 28,S08,S34 5 9,21S,170 5 84,8S3,329 5 1hese 8onds LhaL are noL general obllgaLlons of Lhe ClLy and are noL secured by Lhe full falLh and credlL of Lhe ClLy nor are Lhey payable from Lhe general revenues or asseLs of Lhe ClLy. Cert|f|cates of art|c|pat|on-Stad|um due through 2028, 1.42 to S.70 1axab|e Lconom|c and Commun|ty Dev. (Core C|ty 8onds) Ser|es 2004 & 2008 due through 2033, .14 to S.40 Lower Luc||d Ave. 1II 2003A&8 due through 2032, 1.00 to S.00 Annua| Appropr|at|on 8onds - I|ats Last 8ank due through 203S, 2.60 to 6.00 20. 2014 8ond Debt Load Descr|pt|ons of the Governmenta| Debt Cb||gat|ons g 4 of 7 Genera| Cb||gat|on 8onds: 282.6 5 M||||on Urban kenewa| 8onds: 4.3 5 M||||on Subord|nated Income 1ax kefund|ng 8onds 46.9 5 M||||on LffecLlve May 19, 2011, Lhe ClLy lssued 531,260,000 varlous urpose Ceneral CbllgaLlon 8onds, Serles 2011. 1heproceeds of Lhe bonds wlll be used Lo pay cosLs of var|ous pub||c |mprovements to pub||c fac|||t|es, parks and recreat|on fac|||t|es, cemeter|es and br|dges and roadways and to pay the costs of |ssu|ng the bonds. ln 1993, Lhe ClLy lssued 510,800,000 of urban 8enewal 8onds (kock and ko|| na|| of Iame and Museum ro[ect) for Lhe purpose of paylng a porLlon of Lhe cosLs of Lhe acqu|s|t|on and construct|on of a "port author|ty educat|ona| and cu|tura| fac|||ty" Lo conducL programs of an educaLlonal and lnsLrucLlonal naLurerelaLlng Lo Lhe fleld of conLemporary muslc, lncludlng rock and roll muslc, whlch consLlLuLes Lhe 8ock and 8oll Pall of lame and Museum (Lhe laclllLy). 1he neL proceeds were conLrlbuLed Lo Lhe Cleveland-Cuyahoga CounLy orL AuLhorlLy whlch owns and leases Lhe faclllLy Lo 8ock and 8oll Pall of lame and Museum, lnc., an Chlo non- proflL corporaLlon. 1he 8ock and 8oll Pall of lame and Museum opened ln SepLember 1993. LffecLlve !une 1, 1994, Lhe ClLy lssued 574,700,000 of SubordlnaLed lncome 1ax varlable 8aLe 8efundlng 8onds, Serles 1994 (Lhe 8onds"). 1he proceeds were used Lo fund Lhe ClLy's obllgaLlon for Lhe employer's accrued llablllLy Lo Lhe ollce and llremen's ulsablllLy and enslon lund of Lhe SLaLe of Chlo (Lhe lund"). 1he prlnclpal use of Lhe proceeds was Lhe currenL refundlng of Lhe ClLy's obllgaLlon Lo Lhe lund for Lhe employer's accrued llablllLy ln Lhe amounL of $104,686,400, whlch was payable ln seml-annual lnsLallmenLs of $2,696,243 Lhrough May 13, 2033. ursuanL Lo SecLlon 742.30 (C) of Lhe Chlo 8evlsed Code, Lhe ClLy and Lhe lund enLered lnLo an agreemenL LhaL permlLLed Lhe ClLy Lo make a one Llme paymenL Lo Lhe lund Lo exLlngulsh Lhe ClLy's obllgaLlon. 1he paymenL amounL of $70,493,204 was calculaLed by applylng a 33 dlscounL facLor Lo Lhe $104,686,400 accrued llablllLy plus addlng accrued lnLeresL of $2,447,044. SubordlnaLed lncome 1ax 8efundlng 8onds were lssued Lo fund Lhe C|ty's ob||gat|on for the emp|oyer's accrued ||ab|||ty to the o||ce and I|remen's D|sab|||ty and ens|on Iund of the State of Ch|o. Ceneral CbllgaLlon 8onds are backed by Lhe full falLh and credlL of Lhe ClLy. Such bonds are payable from ad valorem properLy Laxes levled wlLhln Lhe llmlLaLlons provlded by law, lrrespecLlve of wheLher such bonds are secured by oLher recelpLs of Lhe ClLy ln addlLlon Lo such ad valorem properLy Laxes. under Lhe dlrecL debL llmlLaLlon lmposed by Lhe Chlo 8evlsed Code, Lhe ClLy had Lhe capaclLy Lo lssue $310,214,871 of addlLlonal unvoLed debL aL uecember 31, 2011. 20. 2014 8ond Debt Load Descr|pt|ons of the Governmenta| Debt Cb||gat|ons g 3 of 7 Subord|nate L|en Income 1ax 8onds 124.S 5 M||||on 1hls Lype of bond was flrsL uLlllzed ln 2008 Lo be able Lo accompllsh a larger caplLal program Lhan posslble Lhrough replacemenL of reLlrlng Ceneral CbllgaLlon 8ond uebL. ln recenL years Lhe clLy has opLed Lo use Lhls borrowlng capaclLy followlng Lhe 2008 recesslon whlch resulLed ln a lowerlng of properLy values whlch conLlnues Lo negaLlvely lmpacL Lhe CC 8ond uebL llmlL of 3.3 of Assessed valuaLlons. - LffecLlve !une 23, 2010, Lhe ClLy lssued 527,380,000 SubordlnaLe Llen lncome 1ax 8onds, Serles 2010. 1he proceeds of Lhe bonds wlll be used Lo pay cosLs of varlous munlclpal lmprovemenLs lncludlng publlc faclllLles, parks and recreaLlon, and brldges and -LffecLlve november 29, 2012, Lhe ClLy lssued 51S,180,000 of SubordlnaLe Llen lncome 1ax 8onds, Serles 2012. 1hese bonds were lssued Lo provlde funds for Lhe consLrucLlon of a new pollce sLaLlon and clLy-wlde communlcaLlons cenLer. 1he $3,403,000 Serles 2010A-1 8onds were lssued as LradlLlonal Lax-exempL debL. 1he ClLy Look advanLage of several new flnanclng programs creaLed by Lhe Amerlcan 8ecovery and 8elnvesLmenL AcL (A88A) when lssulng Lhe remalnlng porLlon of Lhe bonds. 1he $3,383,000 Serles 2010A-2 8onds were lssued as Laxable 8ulld Amerlca 8onds whlle Lhe $8,243,000 Serles 20108 8onds and Lhe $8,343,000 Serles 2010C 8onds were lssued uslng Lhe ClLy's allocaLlon of Laxable 8ecovery Zone 8onds. ursuanL Lo Lhese programs, Lhe ClLy wlll recelve federal cash subsldles ln amounLs equal Lo a porLlon of Lhe lnLeresL on Lhese bonds. - ln 2013 Lhe ClLy lssued 53S,800,000 of SubordlnaLed Llen lncome 1ax 8onds, Serles 2013 Lo flnance Lhe CaplLal rogram. - ln 2014 Lhe ClLy plans Lo lssue 541,000,000 of SubordlnaLed Llen lncome 1ax 8onds, Serles 2014 Lo flnance Lhe CaplLal rogram. - LffecLlve May 1, 2008, Lhe ClLy lssued 5S9,S60,000 SubordlnaLe Llen lncome 1ax 8onds, Serles 2008. 1he proceeds of Lhe bonds wlll be used Lo pay cosLs of varlous munlclpal lmprovemenLs lncludlng publlc faclllLles, brldges and roadways, parks and recreaLlon faclllLles, cemeLerles and revlLallzaLlon. 1hese bonds are speclal obllgaLlons of Lhe ClLy and are noL general obllgaLlon debL and are noL secured by a pledge of Lhe full falLh and credlL of Lhe ClLy. 1he bonds are payable from Lhe ClLy's munlclpal lncome Lax revenues Lo Lhe exLenL Lhose revenues are noL needed Lo pay debL servlce charges on Lhe ClLy's unvoLed general obllgaLlon debL or unvoLed general obllgaLlon debL lssued ln Lhe fuLure. lL ls Lhe ClLy's lnLenLlon Lo pay Lhe debL servlce on Lhese bonds and Lhe Serles 2008 SubordlnaLe Llen lncome 1ax 8onds from Lhe 8esLrlcLed lncome 1ax collecLlons 20. 2014 8ond Debt Load Descr|pt|ons of the Governmenta| Debt Cb||gat|ons g 6 of 7 NCN-1Ak kLVLNUL 8CNDS Stad|um due through 2020, 3.S0 to S.13 9.S 5 M||||on Cert|f|cates of art|c|pat|on-Stad|um due through 2028, 1.42 to S.70 117.7 5 M||||on 1axab|e Lconom|c and Commun|ty Dev. (Core C|ty 8onds) Ser|es 2004 & 2008 due through 2033, .14 to S.40 39.0 5 M||||on Stad|um: ln !une 1997, CerLlflcaLes of arLlclpaLlon (CCS) ln Lhe amounL of 5139,34S,000 were lssued Lo asslsL ln Lhe consLrucLlon of an open-alr sLadlum for Lhe play of professlonal fooLball and oLher evenLs. ln CcLober 1999, CCS ln Lhe amounL of $20,343,000 were lssued Lo reLlre Lhen ouLsLandlng non- 1ax 8evenue 8ond AnLlclpaLlon noLes. 1he ClLy wlll make lease paymenLs sub[ecL Lo annual approprlaLlon by ClLy Councll and cerLlflcaLlon by Lhe ulrecLor of llnance as Lo Lhe avallablllLy of funds from Lhose approprlaLlons. 1hese obllgaLlons do noL consLlLuLe a debL or pledge of Lhe full falLh and credlL of Lhe ClLy. - 1he ClLy lssued 527,400,000 of 1axab|e Lconom|c and Commun|ty Deve|opment kevenue 8onds, Serles 2003, effecLlve uecember 18, 2003. roceeds of Lhese bonds esLabllshed Lhe Core C|ty Iund wh|ch w||| prov|de funds for |ndustr|a|, commerc|a|, d|str|but|on and research fac|||t|es and res|dent|a| hous|ng |n the C|ty. 1he bonds were lssued wlLh a varlable raLe uslng 28 day aucLlon raLe securlLles. ln 2008 proceeds of Lhese bonds were used Lo refund Lhe ouLsLandlng debL balance,Lo fund a bond reserve fund and Lo pay Lhe cosLs of lssulng Lhe bonds. Stad|um: LffecLlve uecember 16, 2004, Lhe ClLy lssued 514,83S,000 Non-1ax kevenue8onds, Serles 2004 (Cleveland SLadlum ro[ecL) Lo refund Lhe non-1ax8evenue SLadlum 8onds, Serles 1999A&8. 1hese bonds do noL represenL a general obllgaLlon debL or pledge of Lhe full falLh and credlL or Laxlng power of LheClLy, and are payable solely from non-Lax revenues of Lhe ClLy. - Cn november 10, 2004, Lhe ClLy lssued 1axable Lconomlc and CommunlLy uevelopmenL 8evenue 8onds, Serles 2004 (Core ClLy). 1he Serles 2004 8onds were lssued ln Lhe amounL of $19,280,000 Lo pay the costs of certa|n econom|c and commun|ty deve|opment pro[ects. 1hese Serles 2004 8onds were lssued as flxed raLe securlLles and are speclal obllgaLlons of Lhe ClLy, payable from non-Lax revenues and neL pro[ecL revenues. 20. 2014 8ond Debt Load Descr|pt|ons of the Governmenta| Debt Cb||gat|ons g 7 of 7 Annua| Appropr|at|on 8onds - I|ats Last 8ank due through 203S, 2.60 to 6.00 10.8 5 M||||on Lower Luc||d Ave. 1II 2003A&8 due through 2032, 1.00 to S.00 6.4 5 M||||on Gateway Note ayab|e, due through 2016 0.8 5 M||||on
Cap|ta| Lease Cb||gat|ons, due through 2018, 2.26 to 3.22 19.S 5 M||||on - ln 2010 Lhe ClLy Leased 56.7 m||||on of vehlcles under Lhls faclllLy - ln 2011 Lhe ClLy Leased 56.6 m||||on of vehlcles under Lhls faclllLy - ln 2012 Lhe ClLy Leased 56.S m||||on of vehlcles under Lhls faclllLy - ln 2013 Lhe ClLy Leased 56.S m||||on of vehlcles under Lhls faclllLy 1he ClLy has enLered lnLo varlous agreemenLs Lo lease equlpmenL. Such agreemenLs are LreaLed as lease purchases (CaplLal Leases) and are classlfled as long Lerm lease obllgaLlons ln Lhe flnanclalsLaLemenLs. 1he lease conLracLs conLaln annual one-year renewal opLlons LhaL can be exerclsed by Lhe ClLy lf sufflclenL funds are approprlaLed by ClLy Councll. upon Lhe exerclse of each annual one-year renewal opLlon and saLlsfacLlon of Lhe lease obllgaLlons relaLed LhereLo, LlLle Lo Lhe equlpmenL wlll pass Lo Lhe ClLy. ln CcLober 1996, Lhe ClLy and Cuyahoga CounLy each agreed Lo pay 5S,000,000 for add|t|ona| costs assoclaLed wlLh Lhe CaLeway SporLs Complex. 1he amounLs are Lo be repald ln annual lnsLallmenLs of $230,000 for 20 years. 1he monles are deducLed from Lhe monLhly dlsLrlbuLlon of Lhe SLaLe Local CovernmenL lund whlch ls recorded ln Lhe ClLy's Ceneral lund. 1he flrsL deducLlon was made ln March 1997. I|ats Last 8ank: Cn uecember 21, 2010, Lhe ClLy lssued 511,000,000 C|ty Annua| Appropr|at|on 8onds Lhrough Lhe Cleveland-Cuyahoga CounLy orL AuLhorlLy. 1he proceeds of Lhe bonds are belng used Lo prov|de funds for |and purchase and pub||c |mprovements ln Lhe area of Lhe llaLs LasL uevelopmenL ro[ecL. 1he bonds are speclal obllgaLlons of Lhe orL AuLhorlLy payable from approprlaLlon paymenLs made by Lhe ClLy under a cooperaLlve agreemenL. 1he ClLy's obllgaLlon Lo make paymenLs ls sub[ecL Lo and dependenL upon annual approprlaLlons belng made by Lhe ClLy. 1he ClLy lnLends Lo make Lhese debL servlce paymenLs from Lhe 8esLrlcLed lncome 1ax collecLlons. Lconomlc uevelopmenL 8onds Serles 2003A and Serles 20038 (Lower Luc||d Avenuero[ect): -ln november 2003, Lhe ClLy lssued 57,200,000 Lconom|c Deve|opment kevenue 8onds, Serles 2003A and $1,000,000 Lconomlc uevelopmenL 8evenue 8onds, Serles 20038-1 for Lhe Lower Luclld Avenue ro[ecL. - ln november 2004, Lhe flnal 51,000,000 Lconom|c Deve|opment kevenue 8onds, Serles 20038-2 were lssued. 1he proceeds of Lhese bonds were made avallable Lo Lhe owners of cerLaln properLles on Luclld Avenue for Lhe construct|on and renovat|on of commerc|a| restaurant and reta|| fac|||t|es and the construct|on of a park|ng garage. 1hese 1ax lncremenL llnanclng (1ll) 8onds are secured by a pledge of (a) servlce paymenLs ln lleu of Laxes recelved by Lhe ClLy from Lhe owners of cerLaln properLles locaLed wlLhln a Lax lncremenL flnanclng dlsLrlcL, (b) loan paymenLs payable Lo Lhe ClLy and (c) by a pledge of cerLaln non-Lax revenues of Lhe ClLy, sub[ecL Lo Lhe prlor pledge by Lhe ClLy of such non-Lax revenues Lo secure oLher obllgaLlons of Lhe ClLy. 21. Debt Serv|ce kevenue age 1 of 2 21. Debt Serv|ce kevenue age 2 of 2 22. 2012 CAIk - Long 1erm Debt 1ab|e g 1 of 2 22. 2012 CAIk - Long 1erm Debt 1ab|e g 2 of 2 23. 8ond kat|ngs g 1 of 1 Deve|opments affect|ng 8ond kat|ngs s|nce 2012 - uue Lo decreases ln Assessed valuaLlons of properLy sLemmlng from Lhe recenL recesslon, Ceneral CbllgaLlon borrowlng capaclLy has been reduced (llmlLed by 1he Chlo 8evlsed Code Lo 3.3 of valuaLlons) and Lherefore Lhe clLy has been forced Lo shlfL Lo SubordlnaLed Llen noLes and CaplLal Leases Lo fund caplLal programs. uesplLe Lhe slow recovery from Lhe recesslon and lL's negaLlve lmpacLs on Lhe Ceneral lund budgeL, clLy has malnLalned good credlL raLlngs on boLh Lhelr Ceneral CbllgaLlon 8onds and SubordlnaLed Llen noLes (Moody's A1) - unlLed Alrllnes recenLly announced Lhey are dropplng Cleveland as a hub and how Lhey expecL Lo reduce peak day deparLures from 199 Lo 72 by !une 2014. I|tch |mmed|ate|y downgraded A|rport 8onds to 888+ from A-. Powever, Lhese bonds remaln lnvesLmenL grade" by all Lhree raLlng agencles desplLe a slgnlflcanL anLlclpaLed reducLlon ln AlrporL revenues. - Cleveland ubllc ower commlssloned a sLudy by CuS AssoclaLes whlch concluded LhaL power purchase conLracLs currenLly supplylng 60 of Lhe supply are causlng C Lo purchase power aL above markeL raLes. As Lhese conLracLs are long Lerm commlLmenLs, Lhe ConsulLanL's concluslon was LhaL Lhe only way ouL" of Lhls predlcamenL ls Lhrough growLh of Lhe buslness. AlLhough C now has Lransmlsslon llne capaclLy Lo handle cusLomer base expanslon, susLalned growLh has yeL Lo be demonsLraLed. LffecLlve november 26, 2013 Standard and oors kat|ng Serv|ces changed |ts out|ook on C|eve|and ub||c ower from "Stab|e" to "Negat|ve." nowever, they |eft the|r rat|ng of A|rport kevenue 8onds at |nvestment grade A-. 24. A|rport 8onds and Lnterpr|se I|nanc|a|s g 1 of 4 |edges of Iuture kevenues 1he ClLy has pledged fuLure alrporL revenues Lo repay $863,930,000 ln varlous AlrporL SysLem 8evenue 8onds lssued ln varlous years slnce 2001. roceeds from Lhe bonds provlded flnanclng for alrporL operaLlons. 1he bonds are payable from alrporL neL revenues and are payable Lhrough 2033. Annual prlnclpal and lnLeresL paymenLs on Lhe bonds are expecLed Lo requlre less Lhan 61 of neL revenues. 1he LoLal prlnclpal and lnLeresL remalnlng Lo be pald on Lhe varlous AlrporL SysLem 8evenue 8onds ls $1,320,472,000. rlnclpal and lnLeresL pald for Lhe currenL year and LoLal neL revenues (lncludlng oLher avallable funds) were $30,031,000 and $83,173,000, respecLlvely. ln 2014, Lhe ClLy ls plannlng or revlewlng Lhe feaslblllLy of Lhe followlng flnanclngs: 24. A|rport 8onds and Lnterpr|se I|nanc|a|s g 2 of 4 A|rport Spec|a| Iac|||t|es kevenue 8onds AlrporL Speclal 8evenue 8onds, Ser|es 1990, tota||ng 576,320,000 were lssued Lo flnance Lhe acqulslLlon and consLrucLlon of a Lermlnal, hangar and oLher supporL faclllLles leased Lo ConLlnenLal Alrllnes aL Cleveland Popklns lnLernaLlonal AlrporL. 1hese bonds were refunded ln 1999 by Lhe lssuance of AlrporL Speclal 8evenue 8efundlng 8onds, Serles 1999 LoLallng $71,440,000. AddlLlonal A|rport Spec|a| kevenue 8onds, Ser|es 1998, tota||ng $73,120,000, were |ssued |n 1998 to f|nance the des|gn and construct|on of certa|n a|rport fac|||t|es |eased to Cont|nenta| A|r||nes, lncludlng a new reglonal [eL concourse. 8ecause prlnclpal and lnLeresL on Lhese bonds are uncondlLlonally guaranLeed by ConLlnenLal Alrllnes and pald dlrecLly by ConLlnenLal Alrllnes, Lhese bonds do noL consLlLuLe a debL, llablllLy or general obllgaLlon of Lhe ClLy or a pledge of Lhe ClLy's revenues. As such, no llablllLles relaLlng Lo Lhese bonds are lncluded ln Lhe accompanylng flnanclal sLaLemenLs. ln !une 2011, Lhe AlrporL SysLem, under lLs rlghLs Lo opLlonal redempLlon, elecLed Lo deposlL cash on hand lnLo Lhe Serles 2008C 8ond lund and lnLo Lhe Serles 2008P 8ond lund sufflclenL Lo redeem, prlor Lo maLurlLy, all of Lhe ouLsLandlng Serles 2008C and Serles 2008P 8onds. AfLer Laklng lnLo accounL Lhe funds on hand ln Lhe respecLlve bond funds, oLher avallable AlrporL funds were placed lnLo Lhe accounLs Lo pay on !une 22, 2011 prlnclpal ln Lhe amounL of $7,423,000 on Lhe Serles 2008C 8onds and $430,000 on Lhe Serles 2008P 8onds, plus accrued lnLeresL Lo Lhe redempLlon daLe. As a resulL, Lhese bonds have been defeased and Lhe llablllLy for Lhe bonds has been removed from long-Lerm debL. LffecLlve november 16, 2011, Lhe ClLy lssued 574,38S,000 A|rport System kevenue 8onds, Serles 2011A (non- AM1). Cf Lhls amounL, $64,313,000 of Lhe proceeds was lssued Lo pay a porLlon of Lhe cosLs of lmprovemenLs Lo Lhe AlrporL SysLem, Lo fund deposlLs Lo Lhe bond reserve fund and Lhe 8enewal and 8eplacemenL lund and Lo pay lssuance cosLs. 1he remalnlng $9,870,000 was used Lo refund a porLlon of Lhe ouLsLandlng AlrporL SysLem 8evenue 8onds, Serles 2008u ln Lhe aggregaLe prlnclpal amounL of $9,200,000 on november 28, 2011 and Lo pay cosLs of lssulng Lhe bonds. As a resulL, Lhe refunded bonds were defeased and Lhe llablllLy for Lhese bonds removed from long-Lerm debL. 1he ClLy obLalned an economlc galn (Lhe dlfference beLween Lhe presenL values of Lhe old and new debL servlce) of approxlmaLely $1.67 mllllon as a resulL of Lhe refundlng. LffecLlve lebruary 23, 2012, Lhe ClLy lssued 523S,1S0,000 A|rport System kevenue 8onds, Serles 2012A. roceeds of Lhe bonds were used Lo refund Lhe ouLsLandlng $249,443,000 AlrporL SysLem 8evenue 8onds, Serles 2000A and Lo pay Lhe cosLs of lssulng Lhe bonds. neL proceeds of Lhe Serles 2012A 8onds, amounLs on hand ln Lhe Serles 2000 lnLeresL accounL and an amounL released from Lhe debL servlce reserve fund LoLallng $232,378,809 were placed ln an lrrevocable escrow accounL Lo pay Lhe prlnclpal and lnLeresL on Lhe refunded bonds on March 26, 2012. As a resulL, Lhe refunded bonds were defeased and Lhe llablllLy for Lhe 2000A 8onds has been removed from long-Lerm debL. 1he ClLy compleLed Lhe refundlng ln order Lo achleve debL servlce savlngs of approxlmaLely $23.1 mllllon or an economlc galn (Lhe dlfference beLween Lhe presenL values of Lhe old and new debL servlce) of approxlmaLely $13.12 mllllon or 6.06. 1he ClLy lssued $38,000,000 AlrporL 8evenue 8onds, Ser|es 2013A, effecLlve Aprll 24, 2013. 1he bonds were lssued Lo refund the outstand|ng 5S8,000,000 Ser|es 2008I A|rport kevenue 8onds upon Lhe explraLlon of Lhe exlsLlng leLLer of credlL. 1he bonds were dlrecLly purchased by u.S. 8ank naLlonal AssoclaLlon as varlable raLe bonds. As a resulL of Lhls refundlng, Lhe AlrporL SysLem wlll reallze approxlmaLely $3.4 mllllon or 3.87 of presenL value debL servlce savlngs 24. A|rport 8onds and Lnterpr|se I|nanc|a|s g 3 of 4